ACA implementation continues in 2013

Abstract

While key parts of the Affordable Care Act (ACA)—including the state-based health insurance exchanges and the states’ option for Medicaid expansion—are slated to start in 2014, pharmacists and their patients should be aware of how the health care reform law continues to take effect this year. Following is a broad look at what’s on for 2013. While key parts of the Affordable Care Act (ACA)—including the state-based health insurance exchanges and the states’ option for Medicaid expansion—are slated to start in 2014, pharmacists and their patients should be aware of how the health care reform law continues to take effect this year. Following is a broad look at what’s on for 2013. Closing the Part D doughnut holeStarting January 1, 2013, Medicare Part D patients who reach the doughnut hole (and don't qualify for the low-income Extra Help program) will pay 47.5% for brand-name prescription drugs and 79% for generic prescription drugs.■Health care reform law implementation this year affects the Part D doughnut hole, preventive services, payment reform, and taxes.■The essential health benefits proposed rule has the practical effect of expanding drug coverage.Under the Medicare Coverage Gap Discount Program in ACA, the coverage gap, or doughnut hole, is narrowing incrementally and will be closed by 2020.Part D patients in the doughnut hole have been receiving a 50% discount on eligible brand-name drugs at the point of sale. This year, the federal government adds a subsidy of 2.5% for brand-name drugs. The federal subsidy for brand-name drugs will gradually increase to 25% by 2020; with the 50% discount, 75% of the cost of brand-name drugs in the gap will be covered by 2020.The federal subsidy for generic drugs this year is 21%. By 2020, it also will be 75%. In 2020, Part D patients in the doughnut hole will pay just 25% for both brand-name and generic drugs.Preventive services for patientsStarting January 1, 2013, ACA "provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost," according to www.healthcare.gov/law/timeline/. The funding consists of a 1% increase in federal matching payments for preventive services rated "A" or "B" by the U.S. Preventive Services Task Force and recommended immunizations, according to http://healthreform.kff.org/timeline.aspx.ACA emphasizes preventive care for patients with Medicare too. Under the law, free preventive services for Medicare patients include an annual wellness visit, screenings for cancers and other illnesses, and vaccinations, as described in Your Guide to Medicare's Preventive Services. Last year, the U.S. Department of Health & Human Services (HHS) announced partnerships with CVS Caremark, Sam's Club, Thrifty White, Walgreens, Walmart, and other pharmacies to inform Medicare patients about the free preventive services and the closing of the doughnut hole under ACA.Medicare bundled payment pilot programIn the "bundled payment" model of payment reform, hospitals, physicians, and other providers are paid a flat rate for an episode of care involving a patient's hospitalization, including services in multiple care settings after the hospitalization. For Medicare patients, ACA establishes the voluntary National Pilot Program on Payment Bundling no later than January 1, 2013 for an initial period of 5 years. As soon as January 1, 2016, the HHS Secretary can extend and expand the program. (The similarsounding Bundled Payments for Care Improvement Initiative is a separate but consistent initiative from the CMS Center for Medicare and Medicaid Innovation.)A model in ACA with a similar impact on pharmacists is the valuebased purchasing program, said L. David Harlow III, PharmD, Chief Pharmacy Officer at Martin Health System in Stuart, FL. These models have the effect of decreasing reimbursement. "The tighter the margins become in efficiencies expected in health systems," the more pharmacy must demonstrate a direct impact on revenue and income by increasing capacity, decreasing expenses, and so on, he told Today.In a slide from a related presentation, Harlow wrote that in a changing reimbursement landscape, "the relevance and success of pharmacy will depend largely on our ability to move into direct patient care roles that are easily tied to monetary benefit and increased positive qualitative and quantitative measures that support scorecard metrics."New taxes under ACASeveral tax-related changes in ACA take effect January 1, 2013. The Medicare Part A tax rate on wages will increase by 0.9% on earnings over $200,000 for single taxpayers and $250,000 for couples filing jointly. Investment income will be taxed at 3.8% of modified adjusted gross incomes over $200,000 for single taxpayers and $250,000 for couples filing jointly, according to news outlets.For taxpayers younger than 65 years, the threshold for itemizing deductions for medical expenses will increase from 7.5% of adjusted gross income to 10% of adjusted gross income. For taxpayers aged 65 years and older, the increase doesn't start until 2017. For workers, the amount they can contribute to flexible spending accounts for medical expenses is limited in 2013 to $2,500 per year.Expanded drug coverage in EHB proposed ruleEssential health benefits (EHB) offered In health Insurance plans for the Individual and small group markets starting in 2014 must cover either one drug in every category and class or the same number of drugs in each category and class as a state-specific benchmark plan, whichever is greater, according to a proposed rule announced by the U.S. Department of Health & Human Services (HHS) on November 20, 2012.The expanded drug coverage represents a change from HHS guidance released in December 2011 that required a minimum of one drug per category and class. Patient advocacy groups had pressed for the change, but the Academy of Managed Care Pharmacy released a statement on November 27, 2012, that patient access to the right medications must be balanced with cost to ensure affordability. Comments from stakeholders on the EHB proposed rule were due December 26, 2012.The EHB proposed rule was announced on the same day as two other proposed rules related to the ban on discrimination against patients with preexisting conditions starting in 2014 (health insurance companies will only vary premiums based on age, tobacco use, family size, and geography) and employer-based wellness programs, according to HHS.Also in ACA this year, employers can no longer take federal subsidies for continuing Part D retiree drug coverage as a tax deduction.View Large Image Figure ViewerDownload (PPT) Closing the Part D doughnut holeStarting January 1, 2013, Medicare Part D patients who reach the doughnut hole (and don't qualify for the low-income Extra Help program) will pay 47.5% for brand-name prescription drugs and 79% for generic prescription drugs.■Health care reform law implementation this year affects the Part D doughnut hole, preventive services, payment reform, and taxes.■The essential health benefits proposed rule has the practical effect of expanding drug coverage.Under the Medicare Coverage Gap Discount Program in ACA, the coverage gap, or doughnut hole, is narrowing incrementally and will be closed by 2020.Part D patients in the doughnut hole have been receiving a 50% discount on eligible brand-name drugs at the point of sale. This year, the federal government adds a subsidy of 2.5% for brand-name drugs. The federal subsidy for brand-name drugs will gradually increase to 25% by 2020; with the 50% discount, 75% of the cost of brand-name drugs in the gap will be covered by 2020.The federal subsidy for generic drugs this year is 21%. By 2020, it also will be 75%. In 2020, Part D patients in the doughnut hole will pay just 25% for both brand-name and generic drugs. Starting January 1, 2013, Medicare Part D patients who reach the doughnut hole (and don't qualify for the low-income Extra Help program) will pay 47.5% for brand-name prescription drugs and 79% for generic prescription drugs. ■Health care reform law implementation this year affects the Part D doughnut hole, preventive services, payment reform, and taxes.■The essential health benefits proposed rule has the practical effect of expanding drug coverage. ■Health care reform law implementation this year affects the Part D doughnut hole, preventive services, payment reform, and taxes.■The essential health benefits proposed rule has the practical effect of expanding drug coverage. ■Health care reform law implementation this year affects the Part D doughnut hole, preventive services, payment reform, and taxes.■The essential health benefits proposed rule has the practical effect of expanding drug coverage. Under the Medicare Coverage Gap Discount Program in ACA, the coverage gap, or doughnut hole, is narrowing incrementally and will be closed by 2020. Part D patients in the doughnut hole have been receiving a 50% discount on eligible brand-name drugs at the point of sale. This year, the federal government adds a subsidy of 2.5% for brand-name drugs. The federal subsidy for brand-name drugs will gradually increase to 25% by 2020; with the 50% discount, 75% of the cost of brand-name drugs in the gap will be covered by 2020. The federal subsidy for generic drugs this year is 21%. By 2020, it also will be 75%. In 2020, Part D patients in the doughnut hole will pay just 25% for both brand-name and generic drugs. Preventive services for patientsStarting January 1, 2013, ACA "provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost," according to www.healthcare.gov/law/timeline/. The funding consists of a 1% increase in federal matching payments for preventive services rated "A" or "B" by the U.S. Preventive Services Task Force and recommended immunizations, according to http://healthreform.kff.org/timeline.aspx.ACA emphasizes preventive care for patients with Medicare too. Under the law, free preventive services for Medicare patients include an annual wellness visit, screenings for cancers and other illnesses, and vaccinations, as described in Your Guide to Medicare's Preventive Services. Last year, the U.S. Department of Health & Human Services (HHS) announced partnerships with CVS Caremark, Sam's Club, Thrifty White, Walgreens, Walmart, and other pharmacies to inform Medicare patients about the free preventive services and the closing of the doughnut hole under ACA. Starting January 1, 2013, ACA "provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost," according to www.healthcare.gov/law/timeline/. The funding consists of a 1% increase in federal matching payments for preventive services rated "A" or "B" by the U.S. Preventive Services Task Force and recommended immunizations, according to http://healthreform.kff.org/timeline.aspx. ACA emphasizes preventive care for patients with Medicare too. Under the law, free preventive services for Medicare patients include an annual wellness visit, screenings for cancers and other illnesses, and vaccinations, as described in Your Guide to Medicare's Preventive Services. Last year, the U.S. Department of Health & Human Services (HHS) announced partnerships with CVS Caremark, Sam's Club, Thrifty White, Walgreens, Walmart, and other pharmacies to inform Medicare patients about the free preventive services and the closing of the doughnut hole under ACA. Medicare bundled payment pilot programIn the "bundled payment" model of payment reform, hospitals, physicians, and other providers are paid a flat rate for an episode of care involving a patient's hospitalization, including services in multiple care settings after the hospitalization. For Medicare patients, ACA establishes the voluntary National Pilot Program on Payment Bundling no later than January 1, 2013 for an initial period of 5 years. As soon as January 1, 2016, the HHS Secretary can extend and expand the program. (The similarsounding Bundled Payments for Care Improvement Initiative is a separate but consistent initiative from the CMS Center for Medicare and Medicaid Innovation.)A model in ACA with a similar impact on pharmacists is the valuebased purchasing program, said L. David Harlow III, PharmD, Chief Pharmacy Officer at Martin Health System in Stuart, FL. These models have the effect of decreasing reimbursement. "The tighter the margins become in efficiencies expected in health systems," the more pharmacy must demonstrate a direct impact on revenue and income by increasing capacity, decreasing expenses, and so on, he told Today.In a slide from a related presentation, Harlow wrote that in a changing reimbursement landscape, "the relevance and success of pharmacy will depend largely on our ability to move into direct patient care roles that are easily tied to monetary benefit and increased positive qualitative and quantitative measures that support scorecard metrics." In the "bundled payment" model of payment reform, hospitals, physicians, and other providers are paid a flat rate for an episode of care involving a patient's hospitalization, including services in multiple care settings after the hospitalization. For Medicare patients, ACA establishes the voluntary National Pilot Program on Payment Bundling no later than January 1, 2013 for an initial period of 5 years. As soon as January 1, 2016, the HHS Secretary can extend and expand the program. (The similarsounding Bundled Payments for Care Improvement Initiative is a separate but consistent initiative from the CMS Center for Medicare and Medicaid Innovation.) A model in ACA with a similar impact on pharmacists is the valuebased purchasing program, said L. David Harlow III, PharmD, Chief Pharmacy Officer at Martin Health System in Stuart, FL. These models have the effect of decreasing reimbursement. "The tighter the margins become in efficiencies expected in health systems," the more pharmacy must demonstrate a direct impact on revenue and income by increasing capacity, decreasing expenses, and so on, he told Today. In a slide from a related presentation, Harlow wrote that in a changing reimbursement landscape, "the relevance and success of pharmacy will depend largely on our ability to move into direct patient care roles that are easily tied to monetary benefit and increased positive qualitative and quantitative measures that support scorecard metrics." New taxes under ACASeveral tax-related changes in ACA take effect January 1, 2013. The Medicare Part A tax rate on wages will increase by 0.9% on earnings over $200,000 for single taxpayers and $250,000 for couples filing jointly. Investment income will be taxed at 3.8% of modified adjusted gross incomes over $200,000 for single taxpayers and $250,000 for couples filing jointly, according to news outlets.For taxpayers younger than 65 years, the threshold for itemizing deductions for medical expenses will increase from 7.5% of adjusted gross income to 10% of adjusted gross income. For taxpayers aged 65 years and older, the increase doesn't start until 2017. For workers, the amount they can contribute to flexible spending accounts for medical expenses is limited in 2013 to $2,500 per year.Expanded drug coverage in EHB proposed ruleEssential health benefits (EHB) offered In health Insurance plans for the Individual and small group markets starting in 2014 must cover either one drug in every category and class or the same number of drugs in each category and class as a state-specific benchmark plan, whichever is greater, according to a proposed rule announced by the U.S. Department of Health & Human Services (HHS) on November 20, 2012.The expanded drug coverage represents a change from HHS guidance released in December 2011 that required a minimum of one drug per category and class. Patient advocacy groups had pressed for the change, but the Academy of Managed Care Pharmacy released a statement on November 27, 2012, that patient access to the right medications must be balanced with cost to ensure affordability. Comments from stakeholders on the EHB proposed rule were due December 26, 2012.The EHB proposed rule was announced on the same day as two other proposed rules related to the ban on discrimination against patients with preexisting conditions starting in 2014 (health insurance companies will only vary premiums based on age, tobacco use, family size, and geography) and employer-based wellness programs, according to HHS.Also in ACA this year, employers can no longer take federal subsidies for continuing Part D retiree drug coverage as a tax deduction. Several tax-related changes in ACA take effect January 1, 2013. The Medicare Part A tax rate on wages will increase by 0.9% on earnings over $200,000 for single taxpayers and $250,000 for couples filing jointly. Investment income will be taxed at 3.8% of modified adjusted gross incomes over $200,000 for single taxpayers and $250,000 for couples filing jointly, according to news outlets. For taxpayers younger than 65 years, the threshold for itemizing deductions for medical expenses will increase from 7.5% of adjusted gross income to 10% of adjusted gross income. For taxpayers aged 65 years and older, the increase doesn't start until 2017. For workers, the amount they can contribute to flexible spending accounts for medical expenses is limited in 2013 to $2,500 per year. Expanded drug coverage in EHB proposed ruleEssential health benefits (EHB) offered In health Insurance plans for the Individual and small group markets starting in 2014 must cover either one drug in every category and class or the same number of drugs in each category and class as a state-specific benchmark plan, whichever is greater, according to a proposed rule announced by the U.S. Department of Health & Human Services (HHS) on November 20, 2012.The expanded drug coverage represents a change from HHS guidance released in December 2011 that required a minimum of one drug per category and class. Patient advocacy groups had pressed for the change, but the Academy of Managed Care Pharmacy released a statement on November 27, 2012, that patient access to the right medications must be balanced with cost to ensure affordability. Comments from stakeholders on the EHB proposed rule were due December 26, 2012.The EHB proposed rule was announced on the same day as two other proposed rules related to the ban on discrimination against patients with preexisting conditions starting in 2014 (health insurance companies will only vary premiums based on age, tobacco use, family size, and geography) and employer-based wellness programs, according to HHS. Essential health benefits (EHB) offered In health Insurance plans for the Individual and small group markets starting in 2014 must cover either one drug in every category and class or the same number of drugs in each category and class as a state-specific benchmark plan, whichever is greater, according to a proposed rule announced by the U.S. Department of Health & Human Services (HHS) on November 20, 2012.The expanded drug coverage represents a change from HHS guidance released in December 2011 that required a minimum of one drug per category and class. Patient advocacy groups had pressed for the change, but the Academy of Managed Care Pharmacy released a statement on November 27, 2012, that patient access to the right medications must be balanced with cost to ensure affordability. Comments from stakeholders on the EHB proposed rule were due December 26, 2012.The EHB proposed rule was announced on the same day as two other proposed rules related to the ban on discrimination against patients with preexisting conditions starting in 2014 (health insurance companies will only vary premiums based on age, tobacco use, family size, and geography) and employer-based wellness programs, according to HHS. Essential health benefits (EHB) offered In health Insurance plans for the Individual and small group markets starting in 2014 must cover either one drug in every category and class or the same number of drugs in each category and class as a state-specific benchmark plan, whichever is greater, according to a proposed rule announced by the U.S. Department of Health & Human Services (HHS) on November 20, 2012. The expanded drug coverage represents a change from HHS guidance released in December 2011 that required a minimum of one drug per category and class. Patient advocacy groups had pressed for the change, but the Academy of Managed Care Pharmacy released a statement on November 27, 2012, that patient access to the right medications must be balanced with cost to ensure affordability. Comments from stakeholders on the EHB proposed rule were due December 26, 2012. The EHB proposed rule was announced on the same day as two other proposed rules related to the ban on discrimination against patients with preexisting conditions starting in 2014 (health insurance companies will only vary premiums based on age, tobacco use, family size, and geography) and employer-based wellness programs, according to HHS. Also in ACA this year, employers can no longer take federal subsidies for continuing Part D retiree drug coverage as a tax deduction.